The Wall Street Journal reports that on June 15th Calpers, The California Public Employees’ Retirement System, will slice the number of private equity firms and real estate funds in half.

This is a huge deal.

With over $US300 billion under management Calpers is the largest public pension fund in the country, and when it makes a move, other institutional investors follow. Last September it divested itself entirely from hedge funds arguing that the fees it was paying were too much for the returns hedge funds were generating.

A Calpers representative said the fund was returning to “back to basics” investing. Pension funds in New Jersey and Pennsylvania are watching that very closely.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.